Opinion on the current state of Canadian housing market: “One of the biggest bubbles of all time”

Today’s red hot real estate markets in Canada are making one of North America’s best known economists warn about extreme danger.

According to David Rosenberg, the chief economist and strategist at Rosenberg Research, Canadian housing valuations is a “huge bubble”.

“It might be one of the largest bubbles on record,” – he noted on Wednesday. “Of course, we should have expected it due to the current mortgage rates level.”

As you know, the central bank kept its key lending rate unchanged yesterday and noted that the latest housing market activity was much stronger than expected.

Canada’s biggest market made the headlines last week when TRREB said the average home price in the GTA was up by 14.9% annually and reached a record $1,045,488 last month. In addition to it, Vancouver saw home sales rising by 42.8% above the 10-year average.

Rosenberg says the main national housing price has faced double-digit increases with almost no wage growth which could have helped Canadians keep up with the hikes. In his opinion, the relationship between income and real estate prices in Canada now are similar to the imbalance between incomes and tech stocks during the dot-com boom-and-bust cycle.

“I’m very cautious when it comes to the valuations in residential real estate. Would I buy a property today as an investment in Canada or in the GTA? Absolutely not. I would rather enter the stock market.”

We are watching real estate and mortgage market very closely and publishing all sorts of opinions and predictions from reliable sources, but we encourage our readers to take all forecasts with the grain of salt, since situation might change and predictions get adjusted. Buy your home only when you are mentally and financially ready!